BackUsha International sells its stake in Honda Siel
Firm to sell its entire 3.16% stake in JV
Premium(Ramesh Pathania/Mint)
New Delhi: Siddharth Shriram-led Usha International Ltd (UIL) said on Friday that it will sell its entire 3.16% stake in Honda Siel Cars India Ltd (HSCI), a joint venture with Japanese automaker Honda Motor Co. Ltd.
Usha will sell its 8,000,000 shares at ₹ 100 apiece and stands to make ₹ 180 crore including a non-compete fee paid to Usha by Honda, the company said in a statement.
In March, Business Standard newspaper published a report about growing discord between the two partners and UIL’s willingness to sell its entire stake in the car maker.
“Usha provided some of its best people to the joint ventures. Usha feels that it was inevitable that some day the parting would come because automobiles are not really Usha’s direct business. Usha is pleased to have helped one of the great companies of the world to settle into India and to offer the best products in the world to Indian customers," a UIL statement said.
The 16-year-old joint venture allowed the Japanese company to set up a base in the country, producing cars such as the City, Civic, Accord, CR-V, Jazz and Brio. In 2010, Honda ended the joint venture between its two-wheeler arm and the Munjal-owned Hero Group. It sold its 26% stake in the then Hero Honda Motors Ltd to the Munjal family for ₹ 3,800 crore. The Japanese company makes and sells two-wheelers in India with its unit Honda Motorcycles and Scooters India.
In another statement, HSCI said UIL wanted to exit the joint venture to focus on its core business. Usha makes fans, sewing machines, kitchen appliances, water coolers and auto components.
HSCI will now be a 100% Honda subsidiary in India. The process of changing the company’s name and other formalities will be completed over the next few months.
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